• A Momentary Lapse of Reason in Ohio
  • December 21, 2009 | Author: James P. Hanratty
  • Law Firm: Marshall, Dennehey, Warner, Coleman & Goggin - Akron Office
  • Since the landmark decision by the Ohio Supreme Court in Robinson v. Bates, (2006) 112 Ohio St. 3d 17, changed how juries determine the reasonable amount of claimed medical bills, the plaintiff's bar has been frantically seeking ways to avoid its application. Recent decisions by several trial courts indicate that, for now at least, the defense's ability to argue for more reasonable economic damages may be in jeopardy.

    In the Robinson case, the Ohio Supreme Court ruled that defendants can introduce evidence of amounts accepted by the health care provider as payment in full as evidence of the reasonable value of that service. The Court held that introduction of this data does not violate the collateral source rule, which has historically prevented the admission of evidence of payments by health or disability insurance carriers. The Robinson Court held that evidence that portions of medical bills have been "written off" does not violate the collateral source rule because no one will ever have to pay the "written off" portion of the bill. The Robinson decision permitted plaintiffs to introduce evidence of the amount charged and defendants to admit evidence of the amount accepted. The Court held that both numbers were relevant to allow the trier of fact to determine the reasonable value of the medical services.

    As a result of this decision, it has been common for stipulations between counsel to define the reasonable amount of medical treatment at a level that is much lower than the amounts charged by the health care provider. When the parties cannot agree to a stipulation, and each party introduces their respective amounts, it puts the plaintiff in the position of arguing damages that were not actually incurred and can be a strategic windfall for the defense. The application of this case has resulted in lower verdicts due to the lower amounts of special damages (economic damages) being presented to the jury.

    However, in a growing number of Ohio counties, the plaintiff's bar has successfully argued that Robinson v. Bates was legislatively overruled by Ohio Revised Code Section 2315.20 and is not applicable to cases which accrued after April 7, 2005, the effective date of the statute. The basis for this argument is that the Robinson decision contained a footnote that stated as follows:

    We note that, effective April 7, 2005, the General Assembly passed R.C. 2315.20, a statute titled, "Introduction of Collateral Benefits in Tort Actions." The purpose of this statute was to set forth Ohio's statement of law on the collateral-source rule. This new collateral-benefits statute does not apply in this case, however, because it became effective after the cause of action accrued and after the complaint was filed.

    RC2315.20, states that:

    In any tort action, the defendant may introduce evidence of any amount payable as a benefit to the plaintiff as a result of the damages that result from an injury, death, or loss to person or property that is the subject of the claim upon which the action is based, except if the source of collateral benefits has a mandatory self-effectuating federal right of subrogation, a contractual right of subrogation, or a statutory right of subrogation. . . ."

    The attacks on the Robinson decision are two pronged. First, and most frequently, plaintiffs argue that the footnote in the Robinson case recognizes that the decision does not apply to cases that accrued after April 7, 2005. A growing number of trial courts have accepted this argument and excluded evidence of payments made by health insurance carriers, or amounts accepted by providers as a result of negotiations or contracts with health insurance carriers. Some examples of this line of decisions are Palm v. Burmeister, et al., (July 31, 2007), Lucas County Common Pleas Case No CI06-3579; Almaguer v. King, (Sept. 13, 2007), Lucas County Common Pleas Case No G-4801-CI-200605776-000. These decisions ignore the fact that the Robinson Court focused on the "write-offs" rather than the payments. "Write-offs" are not payments by anyone and, therefore, are not collateral benefits. Some courts have recognized this and have upheld the Robinson decision in cases accruing after April 7, 2005. In Schlegel v. Li Chen Song, (2007) 493 F.Supp. 2d 918, the U.S. District Court for the Northern District of Ohio held that:

    In Robinson, the court held "the collateral source rule does not apply to write-offs of expenses never paid. Because no one pays the write-off, it cannot possibly constitute payment of any benefit from a collateral source." Similarly, Section 2315.20 only excludes the admission of evidence of amounts payable as benefits to plaintiffs from collateral sources with rights of subrogation.

    The Schlegel Court determined that the statutory language of RC 2315.20 is in agreement with the conclusion that the fairest approach is to admit evidence of the original medical bill and the amount accepted as full payment in order to permit the jury to determine the reasonable value of the plaintiff's medical treatment.

    More recent decisions have accepted a second prong of attack on the Robinson holding. In Herron v. Anderson, Summit County Common Pleas Case No. CV 2007 04 2600, the court held that introducing evidence of a write-off would permit the jury to form a "logical deduction" that the total billed amount, less the write-off amount, equals the amount paid by an insurance carrier. The court determined that this would be in "direct contravention of the inherent meaning and intent of the statute" (R.C. 2305.20). This line of reasoning has been followed by a few other trial courts as well.

    It seems that for the short term, trial courts will continue to exclude evidence of write-offs based upon the two prongs of the plaintiff's attack on the Supreme Court's holding in Robinson v. Bates. However, it is illogical to assume that the Supreme Court intended to have its ruling on this issue be a temporary measure. Surely the Court did not intend that their decision be obsolete within months of its publication. The Supreme Court in Ohio is generally conservative and will likely reject the arguments that seek to limit its holding to a small window of time. Unfortunately, it will take some time for cases to proceed through the appellate process and reach the Supreme Court for review.